Computer System To Blame For UK Tax Credit Fiasco

by Robert Lee, Tax-News.com, London

19 June 2003

The shortcomings of a new computer system have been largely to blame for the Inland Revenue's bungling of the new child tax credits introduced this year, the government has admitted.

The root cause appears to be the system's inability to cope with the high volume of claims (some 5.1 million are entitled to claim the new tax credit compared to 1 million who could claim the former tax credit, according to a revenue spokewoman) and suffered significant periods of downtime as a result.

Dawn Primarolo, the Paymaster General has confirmed the system 'has not been working as well as we expected and there has been unscheduled down time as a result,' adding: 'The Inland Revenue are working urgently with their IT partners to improve the system's availability, speed and stability.'

Inland Revenue staff have unfortunately been the ones to bear the brunt of the public's anger resulting from the thousands of delayed claims and last month several offices staged fifteen minute walk outs in protest against the unbearable conditions in which they were compelled to work. According to the Union representing the IR staff, the Public and Commercial Services Union, on one day alone, tax offices received around 9 million telephone calls from the public forcing the Revenue to shut down the system completely.

A spokeswoman from the Inland Revenue said the department was currently dealing with around 25,000 claims per day, though she claimed it was catching up on the backlog. 'We have temporary measures in place while we are making the system more robust where people can go to their local Inland Revenue enquiry centre and get a giro,' said the spokewoman.

According to recent reports, Inland Revenue chairman Sir Nicholas Montague has suggested that some form of action against the firm who supplied the computer system, EDS, is being considered.

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